Alaska Airlines And Virgin America Begin Process Of Merging
Alaska Air Group (NYSE:ALK) has formally begun the process of merging with San Francisco-based Virgin America after officially closing on the acquisition. The merger has created what is now the fifth largest U.S. airline. The combined operation will have an expanded route network of nearly 1,200 daily flights to 118 destinations in the United States, Mexico, Canada, Costa Rica and Cuba. The U.S. Justice Department gave its go-ahead for the merger last week.
The new combined operation will be led by Alaska Air CEO Brad Tilden. Virgin America’s senior vice president and chief financial officer Peter Hunt will become president of the Virgin America subsidiary and Ben Minicucci, Alaska Air’s chief operating officer, will be CEO of the unit. The Federal Aviation Administration (FAA) certification that will allow the two airlines to operate as a single carrier is expected within the next year. Regional sister carrier, Horizon Air, will remain on its own with a separate operating certificate.
The company unveiled a specially painted Boeing 737-900ER featuring elements of each carrier’s brand to mark the occasion. The plane was painted red, purple and blue with the slogan “More to love.” The commemorative plane flew from Seattle to San Francisco International Airport where leaders of the companies revealed details for the newly combined airline. They also announced that the company will give away 1,200 round-trip flights starting today at twogether.differentworks.com to celebrate.
According to a statement from the company, Alaska Air plans to continue operating the Virgin America fleet with its current name and “with no immediate changes to the onboard product or experience” for now. Starting Dec. 19, customers will be able to purchase Virgin America tickets at virginamerica.com or alaskaair.com. Elite members will receive priority check-in and priority boarding on each other’s flights.
Virgin America Elevate members and Alaska Airlines Mileage Plan members will be able to earn reciprocal rewards on each other’s flights. Beginning Jan. 9, Virgin America Elevate members will be asked to open new Mileage Plan accounts. Andrew Harrison, Alaska Air’s chief commercial officer, said, “Down the road we’re only going to have one program. The Elevate miles program will fold into the Mileage Plan program.”
Officials said customers will not lose their points or miles with either carrier. Harrison said, “They won’t expire but will turn into Alaska miles. But we’re not going to have anyone’s Elevate points expire.”
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.